NEW - Understanding Money and Its Functions

Which of the following is NOT a characteristic of money?

• Durability

• Portability

• Invisibility

• Divisibility

What is one of the primary functions of money?

• To serve as a tool for bartering

• To act as a medium of exchange

• To be a form of entertainment

• To provide shelter

Which type of money has intrinsic value?

• Fiat money

• Commodity money

• Digital money

• Near money

In a barter economy, what is the "double coincidence of wants"?

• When two parties have the same item to trade

• When two parties want exactly what the other has to offer

• When two parties agree on a price

• When two parties use money to trade

Which of the following is included in the M1 money supply?

• Savings accounts

• Certificates of deposit

• Checking accounts

• Treasury bonds

What is the main difference between M1 and M2 money supply?

• M1 includes only physical currency, while M2 includes only digital currency

• M1 is a broader measure than M2

• M2 includes M1 plus savings accounts and other near money

• M2 is only used by governments

Which of the following is NOT a function of money?

• Store of value

• Unit of account

• Medium of exchange

• Source of energy

What is fiat money?

• Money that is backed by a physical commodity

• Money that has no intrinsic value but is used as legal tender

• Money that is used in bartering

• Money that is only used in digital transactions

Which characteristic of money ensures it can be easily carried and used?

• Durability

• Portability

• Divisibility

• Uniformity

What is the role of the Bureau of Engraving and Printing?

• To regulate interest rates

• To print and produce U.S. currency

• To manage the stock market

• To set tax policies